10-K: Criteo S.A. Reports Modest 2025 Growth, Strategic Domicile Shift

Criteo S.A. announced a 1% revenue increase in 2025, driven by Retail Media, alongside plans to transfer its legal domicile to Luxembourg.

Summary

• Revenue for the year ended December 31, 2025, was $1,944.9 million, an increase of 1% compared to the prior year, remaining flat at constant currency.
• Gross profit increased by 7% to $1,049.4 million in 2025, primarily due to lower traffic acquisition costs, reduced hosting costs, and decreased depreciation expense of data center servers.
• Contribution ex-TAC rose by 5% to $1,174.6 million in 2025 (3% at constant currency), driven by growth in both Retail Media and Performance Media.
• Net income increased by 30% to $149.4 million in 2025, primarily attributable to higher gross profit.
• Adjusted EBITDA increased by 4% to $406.7 million in 2025, mainly due to higher Contribution ex-TAC, partially offset by increased operating expenses.
• Cash flow from operating activities was $311.2 million in 2025, up from $258.2 million in the prior year.
• Retail Media revenue grew by 2% (2% at constant currency) to $263.9 million, showing strength in onsite retail media, particularly in the U.S. market.
• Performance Media revenue remained flat (decreased 1% at constant currency) at $1,681.0 million, impacted by lower spend in AdTech services and soft retail trends, partially offset by strength in travel and marketplaces.
• The company's client retention rate remained approximately 90% for each of the last three years, with approximately 16,786 clients as of December 31, 2025.
• A large U.S. retailer, primarily a Performance Media customer, filed for bankruptcy in 2025, leading to a full allowance of $5.9 million for related receivables.
• The company recorded accelerated amortization of $7.9 million and a nonrecurring impairment charge of $0.9 million related to internally developed intangible assets due to Google's decision not to deprecate third-party cookies in Chrome.
• Criteo announced its intention to pursue a transfer of its legal domicile from France to Luxembourg via a cross-border conversion, expected to be completed in the third quarter of 2026, subject to shareholder approval.
• The Board authorized an additional $154.0 million for the share repurchase program on February 6, 2026, increasing the total authorized amount to $959.0 million, with $200 million remaining authorization.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive report, highlighting solid profitability and strategic advancements in Retail Media and AI, despite modest overall revenue growth and ongoing challenges in Performance Media and legal/regulatory matters. The strategic Conversion to Luxembourg introduces additional costs and uncertainties.

Positives

• Net income increased significantly by 30% to $149.4 million in 2025.
• Adjusted EBITDA grew by 4% to $406.7 million, demonstrating continued profitability.
• Cash flow from operating activities improved to $311.2 million, indicating strong operational cash generation.
• Gross profit increased by 7% to $1,049.4 million, reflecting improved cost management and revenue quality.
• Retail Media segment showed continued growth, with revenue up 2% (2% at constant currency) to $263.9 million.
• Client retention rate remained high at approximately 90% for the past three years, indicating strong customer satisfaction and platform durability.
• The company maintains robust financial liquidity of approximately $890.9 million as of December 31, 2025.
• The share repurchase program was extended and increased, signaling management's confidence and commitment to shareholder returns.
• A valuation allowance of approximately $9.7 million related to deferred tax assets in the United Kingdom was released due to sustained profitability.
• Strategic partnerships with Google, Microsoft, and Mirakl are expanding advertiser reach and budget pools.
• Integration with Shopify supports small and medium-sized business acquisition efforts.
• Partner-managed markets delivered solid revenue growth of approximately 14% year-over-year in 2025.
• Management concluded that internal control over financial reporting was effective as of December 31, 2025.

Negatives

• Overall revenue growth was modest at 1% (flat at constant currency), indicating challenges in scaling top-line performance.
• Performance Media revenue remained flat (decreased 1% at constant currency), impacted by lower spend in AdTech services and soft retail trends.
• Revenue in the Americas region decreased by 6% (6% at constant currency) to $836.7 million.
• The total number of clients slightly decreased from 17,269 in 2024 to 16,786 in 2025.
• A large customer curtailed services starting November 1, 2025, which accounted for 5% of total revenue in 2025.
• A large U.S. retailer in the Performance Media segment filed for bankruptcy, leading to a $5.9 million allowance for related receivables.
• The company incurred accelerated amortization of $7.9 million and a nonrecurring impairment charge of $0.9 million due to Google's decision not to deprecate third-party cookies, indicating a shift in strategy.
• Financial and Other Income decreased by 74% to $0.8 million, primarily due to a negative impact of foreign exchange and RCF expenses.
• The proposed settlement for the GoodRx legal matter was denied court approval in January 2026, requiring further engagement and re-filing.
• The company paid a €40.0 million ($44.0 million) financial sanction in Q3 2023 related to past GDPR violations from a CNIL investigation, which is currently under appeal.

Risks

• Failure to innovate, enhance brand, and adapt effectively to rapidly changing technology, potentially making offerings less competitive or obsolete.
• Intense competition in the digital advertising market from large, well-established companies (e.g., Amazon, Meta, Google, Microsoft) and new entrants.
• Inability to successfully implement business transformation and achieve global business strategies, leading to potential costs, lost clients, or business disruption.
• Failure of the Criteo AI Engine to accurately predict user engagement or maintain content quality, which could result in significant costs, lost revenue, and diminished business opportunities.
• Inability to effectively integrate or realize the expected benefits of acquisitions or strategic transactions.
• Substantial client concentration in certain markets and solutions, making the company vulnerable to changes in demand from a limited number of clients.
• Adverse effects from regulatory, legislative, or self-regulatory developments regarding internet or online matters, particularly data privacy laws (e.g., GDPR, CCPA, EU AI Act).
• Risks associated with international operations and expansion, including operational challenges, compliance with diverse local laws, and foreign currency exchange rate fluctuations.
• Restrictions on data collection from consumer choice, clients, publishers, browsers, or changes in technology (e.g., limitations on third-party cookies).
• Reliance on the retail, travel, and marketplaces industries for a significant portion of revenue, making the business susceptible to downturns in these sectors.
• Operating in a rapidly evolving industry, making it difficult to evaluate future prospects and sustain profitability.
• Intense competition for employee talent, especially AI experts and software engineers, potentially hindering business objectives.
• Inability to successfully expand into new advertising channels (e.g., Social, CTV, Digital Out of Home) or new industry verticals.
• Increased dependence on advertising agencies as intermediaries, which may adversely affect the ability to attract and retain business.
• Fluctuations in results of operations due to various factors, making future results difficult to predict.
• Security breaches, including cyber-attacks, ransomware, and unauthorized access to personal data and confidential information, leading to reputational harm and monetary damages.
• Inability to protect proprietary information or other intellectual property rights.
• Allegations or determinations that the company's technology infringes the intellectual property rights of others.
• Failures in the systems and infrastructure supporting solutions and operations, potentially disrupting services and causing client loss.
• Inability to use software licensed from third parties or issues with open-source software under restrictive license terms.
• Volatility or decline in the market price for American Depositary Shares (ADSs).
• Actions of activist shareholders impacting business strategies and share price.
• Need for additional capital in the future, which may not be available on favorable terms or may contain restrictive covenants.
• Negative impact from activities of hedge funds or short sellers.
• No current intention to pay dividends, meaning investment return depends on ADS price appreciation.
• Provisions in by-laws and French corporate law that may delay or discourage a sale of the company.
• Limitations on ADS holders' ability to exercise voting rights or participate in preferential subscription rights.
• Difficulty for U.S. investors to enforce civil liabilities against the company or its directors and senior management.
• Differences in shareholder rights under French corporate law compared to U.S. law.
• Adverse effects from macroeconomic and geopolitical uncertainty on advertising spending and credit risk.
• Failure to maintain certain tax regimes applicable to French technology companies.
• Increasingly complex tax issues in many jurisdictions, including new taxes or revised interpretations.
• Failure to maintain an effective system of internal controls over financial reporting.
• Adverse U.S. federal income tax consequences if treated as a 'passive foreign investment company' (PFIC).
• Adverse U.S. federal income tax consequences if a U.S. Holder is treated as owning at least 10% of the ADSs (Controlled Foreign Corporation rules).
• Additional costs and potential management diversion associated with the cross-border Conversion to Luxembourg.
• Legislative, regulatory, administrative, shareholder, or third-party actions that could delay or prevent the Conversion.
• Conditions for the Conversion may not be satisfied, or the company may choose to abandon or delay it.
• Potential delays or failure to complete a subsequent transfer of domicile from Luxembourg to the United States.
• Fluctuations in the market for shares as a result of the Conversion.
• Adverse impact on the tax position due to changes in tax laws in various jurisdictions after the Conversion.
• Lux Criteo potentially becoming a PFIC, leading to adverse U.S. federal income tax consequences.
• Dividends received after the Conversion generally being subject to Luxembourg dividend withholding tax.
• The Conversion potentially not allowing the company to maintain a competitive worldwide effective corporate tax rate.
• Exposure to various Luxembourg taxes as a result of the Conversion.
• Adverse tax and other consequences if the company fails to maintain sufficient presence in Luxembourg.
• Changes in shareholder rights under Luxembourg law compared to French law.
• Legal requirements and limitations on company governance and actions as a Luxembourg company.
• A provision in the Lux Articles enabling an acquiring person to require the sale of all remaining shares (squeeze-out) under certain criteria.
• Restrictions on the ability to pay dividends under Luxembourg law following the Conversion.
• Shareholders potentially facing more challenges in protecting their interests compared to shareholders of a U.S. corporation.
• Holders of ordinary shares potentially unable to exercise preferential subscription rights and suffering dilution.
• Difficulty enforcing civil liabilities against the company or its directors, officers, or other employees in Luxembourg.
• An exclusive forum provision in the Lux Articles that could limit a shareholder's ability to bring a claim in a preferred judicial forum.
• Luxembourg insolvency laws potentially offering less protection to shareholders than U.S. insolvency laws.

Future Outlook

Criteo anticipates continued investment in business growth, focusing on productivity and efficiency through organizational simplification and operational excellence, while maintaining strong profitability. Capital expenditures are projected to remain at or slightly above 9% of revenue for 2026. The company believes its current financial liquidity and expected cash-flow generation in 2026 will be sufficient to meet all material contractual obligations and provide financial flexibility.

Management Comments

• Our vision is to bring richer experiences to every consumer by supporting a fair and open internet that enables discovery, innovation, and choice – powered by trusted and impactful advertising.
• We have accelerated and deeply transformed the Company from a single-product to a multi-solution platform provider, fast diversifying our business into new solutions.
• We believe that we are in a leading position in the Commerce Media space as we have unique commerce data at scale, deep integrations with retailers, a large client base, differentiated technology and an R&D powerhouse.
• By unifying the Commerce Media ecosystem with a multi-retailer, multi-channel, multi-format approach and providing full funnel closed loop measurement to our clients, we believe we are well positioned to capture more ad budgets and market share.
• We plan to drive expansion of our client base across regions, segments and verticals, as a result of our new self-service offering, including Criteo GO.
• Going forward, we intend to continue to optimize our operating model while continuing investments in AI innovation and scaling Retail Media capabilities.

Industry Context

StockSavvy.ai notes that Criteo operates at the intersection of commerce, media, and technology, positioning itself to capture growth in digital advertising as consumer journeys fragment across retail media, open web, social, connected television (CTV), and AI-driven experiences. The company's focus on first-party data and AI-driven solutions addresses industry shifts away from third-party cookies and increasing demand for measurable, performance-oriented advertising. The growth in retail media and CTV advertising aligns with broader market trends, while the emergence of agentic AI presents both opportunities and regulatory challenges.

Comparison to Industry Standards

• Criteo's Retail Media Serviceable Available Market (SAM), excluding Amazon and China, is expected to reach approximately $42 billion in advertising spend by 2026 and $50 billion by 2027, reflecting a compound annual growth rate of about 20%.
• The Total Addressable Market (TAM) for Retail Media, including Amazon and China, is projected to reach approximately $204 billion by 2027.
• The Performance Media SAM is estimated to reach approximately $143 billion by 2026 across addressable channels.
• eMarketer projects global retail ecommerce penetration to reach 23% in 2027, up from 20% in 2024, indicating a growing digital commerce environment.
• Approximately 75% of retail media ad spend in the U.S. is concentrated on Amazon, which accounts for roughly one-third of ecommerce gross merchandise value; Criteo aims to capture market share as brands diversify beyond Amazon.
• Criteo's R&D team is highlighted as one of the largest in the AdTech industry, outside of walled garden platforms, demonstrating significant investment in innovation.
• The consistent client retention rate of approximately 90% for the last three years suggests strong platform durability and client relationships in a competitive market.

Management Changes

Corporate Governance

Legal Proceedings

• CNIL Investigation: In June 2023, the CNIL issued a decision retaining alleged GDPR violations but reducing the financial sanction to €40.0 million ($44.0 million). The payment was made in Q3 2023, and the decision has been appealed before the French Council of State (Conseil d'Etat).
• Doe vs. GoodRx Holdings, Inc. et al.: The company agreed to settle this legal matter for $7.0 million in Q3 2025, with GoodRx agreeing to indemnify $5.5 million. However, the court denied approval of the proposed settlement in January 2026, and discussions are ongoing to re-file the agreement. A net probable loss of $1.5 million was recognized as of December 31, 2025.
• Putative Class Action (CVS): A class action alleging violations regarding sensitive health and personal information was filed against the company, CVS, and others. It was dismissed with respect to the company on October 27, 2025. A second amended complaint was filed on November 7, 2025, but the plaintiff filed a stipulation to dismiss the case on January 30, 2026, and the parties are currently engaged in mediation.
• AlmondNet, Inc. and Intent IQ, LLC Patent-Infringement Lawsuit: Filed on October 17, 2025, alleging patent infringement. The company was served on October 21, 2025, and intends to defend itself vigorously against the allegations.

Stakeholder Impact

• Shareholders: Potential for increased value through share repurchases and strategic transformation, but also face risks from market volatility, legal proceedings, and changes in shareholder rights due to the Conversion to Luxembourg.
• Employees: Subject to ongoing organizational adjustments and cost optimization plans, including past layoffs. Benefit from talent acquisition and development programs, competitive compensation, and a focus on health, safety, and wellness.
• Customers (Brands, Agencies, Retailers, Media Owners): Benefit from the Commerce Intelligence Platform's AI-driven solutions, cross-channel access, and measurement capabilities. However, they are impacted by client concentration risks and potential issues with AI engine performance or data access restrictions.
• Suppliers/Publishers: Relationships are crucial for advertising inventory. They may be affected by changes in data access policies and competitive dynamics in the advertising exchange platforms.
• Creditors: Exposed to credit risks from clients and macroeconomic conditions. The company's compliance with covenants under its Revolving Credit Facility is important for maintaining financial stability.
• Regulatory Authorities: The company is subject to various privacy, data protection, and AI regulations (e.g., GDPR, CCPA, EU AI Act), leading to compliance costs and potential fines, impacting operational flexibility and financial results.

Next Steps

• Conduct a general meeting of shareholders on February 27, 2026, to obtain approval for the Conversion to Luxembourg and related proposals.
• Complete the legal domicile transfer from France to Luxembourg, expected in the third quarter of 2026, if shareholder approval and other conditions are met.
• Pursue a subsequent transfer of domicile from Luxembourg to the United States, subject to the Board's determination.
• Continue to invest in business growth, productivity, and efficiency through organizational simplification and operational excellence.
• Maintain capital expenditures at or slightly above 9% of revenue for 2026, focusing on data center equipment and the Commerce Intelligence Platform.
• Continue to monitor macroeconomic conditions closely and take responsive actions as needed.
• Engage in further discussions with plaintiffs and GoodRx to address the judge's requests and re-file the settlement agreement for the legal matter.
• Defend vigorously against the patent-infringement lawsuit filed by AlmondNet, Inc. and Intent IQ, LLC.
• Ensure compliance with new California privacy regulations (under CCPA) that began to take effect on January 1, 2026.
• Assess the ongoing impact of Pillar Two as additional guidance becomes available.
• Evaluate the impact of recently issued accounting pronouncements, including ASU 2025-06 (Intangibles Goodwill and Other Internal-Use Software) and ASU 2025-10 (Government Grants).

Key Dates

Recommendation

Criteo demonstrates resilience with increased net income and Adjusted EBITDA, driven by Retail Media growth and cost optimization. However, overall revenue growth is modest, Performance Media is flat, and the company faces ongoing challenges from client curtailments, legal proceedings, and a complex regulatory environment, particularly regarding data privacy and AI. The strategic Conversion to Luxembourg introduces additional costs and uncertainties. While the share repurchase program is positive, these mixed signals suggest a 'hold' position for investors awaiting clearer signs of sustained, broad-based growth and resolution of key uncertainties.

Keywords

Digital Advertising, Retail Media, Performance Media, AdTech, AI, Commerce Intelligence, SEC Filing, 10-K, Criteo, CRTO, Data Privacy, Cybersecurity, Corporate Governance, Share Repurchase, Luxembourg Conversion, Financial Results